Section 23 of The Central Goods and Services Tax Act, 2017
- (1)The following persons shall not be liable to registration, namely:---
- (a)any person engaged exclusively in the business of supplying goods or services or both that are not liable to tax or wholly exempt from tax under this Act or under the Integrated Goods and Services Tax Act;
- (b)an agriculturist, to the extent of supply of produce out of cultivation of land. 1[(2) Notwithstanding anything to the contrary contained in sub-section (1) of section 22 or section 24, the Government may, on the recommendations of the Council, by notification, subject to such conditions and restrictions as may be specified therein, specify the category of persons who may be exempted from obtaining registration under this Act.]
Summary
- This provision lists the specific types of people and businesses that are entirely exempt from having to obtain a tax registration.
- Anyone whose entire business consists of supplying goods or services that are wholly exempt or simply not liable to tax does not need to register.
- Agriculturists, meaning farmers who cultivate land, are completely freed from registration for the produce they grow on their own land.
- The government retains the power to formally notify additional categories of people who can be exempted from registration altogether.
Practical examples
FAQ
1. Who is completely exempt from registering under Section 23 of The Central Goods and Services Tax Act, 2017?
Under Section 23 of The Central Goods and Services Tax Act, 2017, agriculturists selling their own produce and people dealing exclusively in exempt or non-taxable goods and services do not need to register.
2. Do local farmers need to register for tax according to Section 23 of the Central GST Act?
Section 23 of the Central GST Act states that an agriculturist is not liable for registration to the extent of supplying produce grown out of their own cultivation of land.
3. Can the government create new registration exemptions under Section 23 of the GST law?
Yes, Section 23 of the GST law allows the government, on the recommendation of the GST Council, to notify new categories of persons who are exempted from obtaining registration.
Test yourself
Q1.Which of the following persons is specifically excluded from registration under Section 23 of The Central Goods and Services Tax Act, 2017?
Q2.Under Section 23 of the CGST Act, when is a business owner supplying goods completely freed from the need to register?
Q3.What special power does the government hold under sub-section (2) of Section 23 of The Central Goods and Services Tax Act, 2017?
Q4.Reading Section 23 along with Section 24 of The Central Goods and Services Tax Act, 2017, how do these provisions interact regarding government notifications?